Economic education today is, for the most part, worse than no economic education at all says economics lecturer Per Bylund. He explains himself in this guest post ...

Economic Education Has Become Economic Disinformation

by Per Bylund

Modern economics is in terrible shape. But economics education appears to be worse still. This becomes clear when discussing basic economics with those who have taken courses in the field. Rather than doing away with economic misunderstandings and outright nonsense, economics education apparently provides students with a pseudoscientific rationale for their illusions.

Two such ideas are annoyingly common. One is the view that markets can only work under perfect conditions. The other is that economic growth requires that profits tend toward zero. Yes, they are ridiculous, but they are so commonly held (and believed so strongly) that they suggest a fundamental failure of economics education. Whether or not they are explicitly taught, it is easy to see how an economics education that focuses on models rather than understanding can lead to—if not create—such misperceptions.

“Markets Only Work under Perfect Conditions”

Introductory economics courses often take the perfectly-competitive model as a starting point so as to introduce students to economic thinking. It makes sense to do it this way. By assuming away complexities, students can be introduced to the economic way of thinking, ceteris paribus reasoning, and supply-and-demand analysis.

The approach is innocent but can be counterproductive or even destructive unless students also learn that a model is merely a simplified version of (and thus different from) reality. The model is not reality, and its assumptions are not real, but because of its simplified assumptions it facilitates analysis of reality. A model is a tool.

This obvious fact seems to not be communicated to economics students, who instead adopt the model wholesale as not only a description of but a necessary condition for reality. In other words, because the supply-and-demand diagram used on the blackboard relies on “perfect information,” many students conclude that real markets only work under such conditions.

It is of course the other way around: markets work because they solve or alleviate the problems that are excluded from the model. As Friedrich Hayek pointed out, there is no competition in the perfectly competitive model. All such activities are assumed to have already taken place so that the allocation under end-state efficiency can be explained—and the economic trend in markets therefore uncovered. But students somehow learn the exact opposite.

“Economic Growth Requires That Profits Tend toward Zero”

This idea is similarly a misapplication and misunderstanding of a model presented to students. In the static model of the economy, under assumptions of perfect information and zero transaction costs, economic profits will be zero. This is mainstream economists’ rather quirky explanation of economic efficiency: because all opportunities have already been taken advantage of, value production is maximized.

As follows from this model logically, profits tend toward zero as market reality closes in on “perfect” competition assumptions (that is, the problems are solved or alleviated). There is empirical support for this too: profits tend to fall in commodity markets and mature industries that are no longer innovative (the low-hanging fruits have been picked). Producers compete on cost rather than value. But this does not mean the economy is in an end-state; it only means some industries (such as grain production) have come to the end of the road in terms of product development—entrepreneurs see little or no opportunities for new value creation.

In reality, economic growth — more accurately economic progress — is the process of closing in on this highly theoretical end-state (which we as economists of the Austrian school realise is only theoretical—it cannot and never will be achieved). Our higher standard of living (economic growth) is the result of innovations that create more value—it is not the result of an absence of innovations.

Education as Disinformation

That students struggle with understanding the use and value of models, and may draw the wrong conclusions when studying market forces in the abstract, is unfortunate but understandable. It is the duty of the economics instructor to make sure students do not get the wrong ideas—that they go home with a greater understanding of how economies and markets work. Education, after all, should be enlightening and provide the student with new knowledge.

But somehow economics education fails to communicate the obvious fact that markets solve problems, not that they require that all problems have already been solved. And that economic growth is the creation of new value, not the absence of creating such value.

The failure of economics education is not merely the unproductive use of instructors’ and students’ time. As the above examples show, it is in fact destructive—students of economics get the wrong ideas and therefore graduate with less (not more) understanding of how markets and economies work.

Economics education with this outcome is disinformation, and we are better off without it.

* * * * 

Per Bylund is Associate Professor of Entrepreneurship at Oklahoma State University, and an Associate Fellow of the Ratio Institute in Stockholm.
Dr. Bylund has published research in top journals in both entrepreneurship and management as well as in both the 'Quarterly Journal of Austrian Economics' and the 'Review of Austrian Economics,' and the author of How to Think about the Economy: A Primer — which you can get free here to kick off off your real economic (re)education. (His article first appeared at the Mises Wire.)

A fast track to cronyism [updated]

 

The media has been slow to pick up on this National-led government's new policy to help out struggling media organisations.

The policy is to announce, and string out, a steady stream of announcements of blatant knuckle-dragging cronyism, primary among them that Fast-Track Approvals Bill, whose invited-applicant list will be an ongoing gift to every media organisation looking for a colourful headline.

And no on top of that, just to drive home the message, is this weekend's gift to television personality and National Party fund-raiser Paula Bennett of the position of highly-paid chair of Pharmac — in the very week they announce a $1.8 billion increase in the unaccountable bureaucracy's budget to $6.3 billion. Her qualifications for the role? In the absence of a single one of any relevance, one would have to speculate it was her record fund-raising and chasing of donors to the National Party at the last election.

And speaking of donors ....  even the worst resourced newsroom should be able to turn out a veritable assembly line's worth of regular feature articles highlighting which party donors have been favoured with which fast-track approval by three ministers of questionable morals and fitness doling them out like largesse at a corrupt king's court.

As I said a few days ago, it's not a "fast track" for you or me or that small renovation you've been putting off for years as just too damned complicated to contemplate — it's a fast track for cronies and for government bulldozers.

How about we all get the benefit a fast track for our projects, little and large, instead of being tangled up in years of the red tape governments festoon around us while cronies enjoy all the fruits of political favouritism?

In the meantime at least, let's watch the media take advantage of the Government's gift. It should be one that promises to keep giving long after the Public Interest Journalism Fund gives out ...

UPDATE: Yes, of course, businesses need to be able to build. And so do you and I —and for too long we've been stymied in trying to build. But this isn't help for you and me — and when National and Shane Jones promise to "help business" that invariably ends up meaning "help particular businessmen." Just as it does here.

Environmentalism is (still) refuted

 

The Simon Abundance Index: 1980-2023 (1980=100)

Several decades ago, gloom-monger Paul Erlich and techno-optimist Julian Simon had a bet.

Erlich was certain resources were running out and humanity was doomed. Simon asserted they weren't and wouldn't be. (Simon, you see, was confident that the ultimate resource, from which all others derive, is the human mind — a machine for turning shit into useful stuff.) The best was that, by the end of that decade, a basket of resources chosen by Erlich would cost more to buy — more, because by then they would be running out.

Simon won. 

Resources weren't running out. 

They still aren't.

The "Simon Abundance Index" (SAI),which measures the relative abundance of resources since that bet, now stands at 609.4. Meaning that in 2023, the Earth was 509.4 percent more abundant in 2023 than it was in 1980!

How astonishing is that! World population since 1980 has almost doubled; while resources produced by human beings have multiplied by more than five times!! 

Turns out that as global population increases, that "virtually all resources became more abundant. How on earth (literally) is that possible?"

Unlike Erlich and the sundry other doom-sayers who litter the planet today, Simon recognised that without the knowledge of how to use them, raw materials have no economic value whatsoever. They are just so much stuff. What transforms a raw material into a resource is knowledge — knowledge of how that stuff might satisfy a human need, and how to place it in a causal connection to satisfy that need. (The great Carl Menger explained this process way back in 1870!) And since new knowledge is potentially limitless, so too are resources.

 Infinite, because the ultimate resource is the human mind.

In this sense, as George Reisman puts it, environmentalism is refuted.

"Horrendously, anti-Semitism comes to be seen as a morally virtuous position."

 

"First it was Columbia, now anti-Israel protests have spread across America. ... The ‘rage of the privileged against the world’s only Jewish nation’ ... now rings out on leafy campuses from California to Boston.
    "In these ostensibly ‘anti-war’ protests, students have demanded the total destruction of Israel, while waving placards in support of Hamas and singling out Jewish professors and students for abuse. The terrifying orgy of anti-Semitism that has been unleashed in America’s top universities should disturb everyone. ...
    "Since the start of their education, today’s students have imbibed a crude understanding that people can be sorted into different groups according to skin colour, gender and sexuality ... indoctrinated into a view that the world can be divided between oppressors and the oppressed. ... taught to loathe their own country and made defensive of their privilege ...
    " In this context, aligning with Palestinians and demonstrating hostility to Israel makes perfect sense. It allows students to identify with an oppressed group and distance themselves from their own nation and culture. That such sentiment can so easily tip over into anti-Semitism is unsurprising. Students have been deluded into thinking that the more extreme their demands for the abolition of Israel, and the more vile their targeting of Jews, the better they show their own virtue.
    "Horrendously, anti-Semitism comes to be seen as a morally virtuous position."

~ Joanna Williams, from her op-ed 'How anti-Semitism became a virtue on American campuses'

"Late-Stage Anti-Capitalism"

"Anti-capitalists used to have whole palaces of economic and social theory to explain the workings of capitalism and the ideal system that would replace it. Now what they have is largely a set of pet peeves with delusions of grandeur."

~ Robert Tracinski, from his newsletter 'Late-Stage Anti-Capitalism'

"Listen!"

                                               

"Listen now. When people talk listen completely. Donʼt be thinking what youʼre going to say. Most people never listen. Nor do they observe."

~ part of Ernest Hemingway's advice to a young writer — and good advice for anybody anytime

 

"Fascism and communism are not two opposites, but two rival gangs fighting over the same territory"

                                     

"It is obvious what the fraudulent issue of fascism versus communism accomplishes: it sets up, as opposites, two variants of the same political system; it eliminates the possibility of considering capitalism; it switches the choice of 'Freedom or dictatorship?' into 'Which kind of dictatorship?' — thus establishing dictatorship as an inevitable fact and offering only a choice of rulers. The choice — according to the proponents of that fraud — is: a dictatorship of the rich (fascism) or a dictatorship of the poor (communism).
       "That fraud collapsed in the 1940s, in the aftermath of World War II. It is too obvious, too easily demonstrable that fascism and communism are not two opposites, but two rival gangs fighting over the same territory — that both are variants of statism, based on the collectivist principle that man is the rightless slave of the state — that both are socialistic, in theory, in practice, and in the explicit statements of their leaders — that under both systems, the poor are enslaved and the rich are expropriated in favour of a ruling clique — that fascism is not the product of the political 'right,' but of the 'left' — that the basic issue is not 'rich versus poor,' but man versus the state, or: individual rights versus totalitarian government — which means: capitalism versus socialism."

~ Ayn Rand, from her article '“Extremism,” or The Art of Smearing' [hat tip Δημήτριος Τσίκας]

 

#ANZAC: "year after year, the numbers grow fewer, who remember what we're not forgetting"

 

'Sacrifice,' by sculptor Rayner Hoff, inside the Australian War Memorial in Sydney's Hyde Park

"It's gratifying, in a way, that we start Anzac Day every year with a commemoration of a shambolic dawn landing that kicked off a pointless and wholly tragic military campaign that snuffed out some of the best young men of two young nations. It's not a victory march, but a sobering commemoration of the destruction of war.
    "This is healthy. This much is good.
    "'Lest we Forget!' we say"
    "It's said every year. And yet year after year, the numbers grow fewer who remember what it was we're not forgetting....

"THE MYTHOLOGY OF ANZAC is that the battle at the Dardanelles gave birth to two nations. If that’s true, it is an odd birth, fathered out of failure by way of disaster.
    "[And] the reason they embarked [was] not to beat the Hun, but to save the Czar [and] gift Constantinople to Russia.... as an altruistic gift to an 'ally' who was the most autocratic in Europe ... the price for the sacrifice to be paid for in the blood of those Australian, New Zealand and British young men and their families....
    "In the end, the attempted occupation [of the Gallipoli peninsula] was decided upon partly because in any bureaucracy once plans are begun they are very hard to stop, and partly too as an altruistic gift to an “ally” who was the most autocratic in Europe, who had shown no sign of earning British trust -- the price for the sacrifice to be paid for in the blood of those Australian, New Zealand and British young men and their families. 
    "Such is the code of sacrifice under which the decision was made to go.... [in pursuit, said Churchill, of] 'a victory such as the war had not yet seen.'
    "It never would. It never could. 
    "Instead, it all turned to omnishambles. The only thing in the end about which anyone had anything about which to boast was a successful and well-executed withdrawal. 
    "It was a bloody mess that achieved nothing, that could achieve nothing, purchased at the price of a wholesale sacrifice of young lives that could have meant something. It was a total unmitigated disaster, but at least, now, dear reader, some reason for the whole, sordid shambles might be clearer. 
    "The reason however for commemorating the shambles as the botched 'birth' (in some way) of our nation is very much less so."

~ excerpted from NOT PC's posts 'Lest we forget what?' and 'But what were the ANZACs fighting for, Grandad?'

#CountdownToAnzacDay: On “the last afterglow of the most radiant cultural atmosphere in human history”

 

One-hundred and ten years ago this week, the world was still at peace.

By August of that year, 1914, the world was at war. And in less than a year, New Zealanders would be fighting, and dying, on  the hills above a beach in Turkey.

That world before the war, the one the war destroyed forever, is captured in palimpsest in the video above of Berlin and Munich in 1900, and in several memories from some who were alive at the time — who were there to witness and record, as one described it, "the last afterglow of the most radiant cultural atmosphere in human history…" — and then to record what came next. 

"I myself have lived at the time of the two greatest wars known to mankind," remembered Stefan Zweig, "Before those wars I saw individual freedom at its zenith, after them I saw liberty at its lowest point in hundreds of years." * 

"Until August 1914 a sensible, law-abiding Englishman could pass through life and hardly notice the existence of the state, beyond the post office and the policeman. He could live where he liked and as he liked. He had no official number or identity card. He could travel abroad or leave his country for ever without a passport or any sort of official permission. He could exchange his money for any other currency without restriction or limit. He could buy goods from any country in the world on the same terms as he bought goods at home. 

    "For that matter, a foreigner could spend his life in this country without permit and without informing the police. Unlike the countries of the European continent, the state did not require its citizens to perform military service. An Englishman could enlist, if he chose, in the regular army, the navy, or the territorials. He could also ignore, if he chose, the demands of national defence. Substantial householders were occasionally called on for jury service. Otherwise, only those helped the state, who wished to do so. 

    "The Englishman paid taxes on a modest scale: nearly £200 million in 1913-14, or rather less than 8 per cent. of the national income. The state intervened to prevent the citizen from eating adulterated food or contracting certain infectious diseases. It imposed safety rules in factories, and prevented women, and adult males in some industries, from working excessive hours. The state saw to it that children received education up to the age of 13. Since 1 January 1909, it provided a meagre pension for the needy over the age of 70. Since 1911, it helped to insure certain classes of workers against sickness and unemployment. This tendency towards more state action was increasing. Expenditure on the social services had roughly doubled since the Liberals took office in 1905. Still, broadly speaking, the state acted only to help those who could not help themselves. It left the adult citizen alone.
    "All this was changed by the impact of the Great War. The mass of the people became, for the first time, active citizens. Their lives were shaped by orders from above; they were required to serve the state instead of pursuing exclusively their own affairs. Five million men entered the armed forces, many of them (though a minority) under compulsion. The Englishman's food was limited, and its quality changed, by government order. His freedom of movement was restricted; his conditions of work prescribed. Some industries were reduced or closed, others artificially fostered. The publication of news was fettered. Street lights were dimmed. The sacred freedom of drinking was tampered with: licensed hours were cut down, and the beer watered by order. The very time on the clocks was changed. From 1916 onwards, every Englishman got up an hour earlier in summer than he would otherwise have done, thanks to an act of parliament. The state established a hold over it citizens which, though relaxed in peacetime, was never to be removed and which the second World war was again to increase. The history of the English state and of the English people merged for the first time.

~ A. J. P. Taylor, on 'The Effects and Origins of the Great War,' from his 1965 book English History, 1914-1945

"What an extraordinary episode in the economic progress of man that age was which came to an end in August 1914!
    "The greater part of the population, it is true, worked hard and lived at a low standard of comfort, yet were, to all appearances, reasonably contented with this lot. But escape was possible, for any man of capacity or character at all exceeding the average, into the middle and upper classes, for whom life offered, at a low cost and with the least trouble, conveniences, comforts, and amenities beyond the compass of the richest and most powerful monarchs of other ages.
    "The inhabitant of London could order by telephone, sipping his morning tea in bed, the various products of the whole earth, in such quantity as he might see fit, and reasonably expect their early delivery upon his doorstep; he could at the same moment and by the same means adventure his wealth in the natural resources and new enterprises of any quarter of the world, and share, without exertion or even trouble, in their prospective fruits and advantages; or he could decide to couple the security of his fortunes with the good faith of the townspeople of any substantial municipality in any continent that fancy or information might recommend. 

    "He could secure forthwith, if he wished it, cheap and comfortable means of transit to any country or climate without passport or other formality, could despatch his servant to the neighbouring office of a bank for such supply of the precious metals as might seem convenient, and could then proceed abroad to foreign quarters, without knowledge of their religion, language, or customs, bearing coined wealth upon his person, and would consider himself greatly aggrieved and much surprised at the least interference. 

    "But, most important of all, he regarded this state of affairs as normal, certain, and permanent, except in the direction of further improvement, and any deviation from it as aberrant, scandalous, and avoidable. The projects and politics of militarism and imperialism, of racial and cultural rivalries, of monopolies, restrictions, and exclusion, which were to play the serpent to this paradise, were little more than the amusements of his daily newspaper, and appeared to exercise almost no influence at all on the ordinary course of social and economic life, the internationalisation of which was nearly complete in practice."

~ J.M Keynes, from his 1919 book The Economic Consequences of the Peace

"As a child, I saw a glimpse of the pre-World War One world, the last afterglow of the most radiant cultural atmosphere in human history … If one has glimpsed that kind of art—& wider: the possibility of that kind of culture—one is unable to be satisfied with anything less. 

    "I must emphasise that I am not speaking of concretes, nor of politics, nor of journalistic trivia, but of that period's 'sense of life.' Its art projected an overwhelming sense of intellectual freedom, of depth, i.e., concern with fundamental problems, of demanding standards, of inexhaustible originality, of unlimited possibilities &, above all, of profound respect for man. The existential atmosphere (which was then being destroyed by Europe's philosophical trends & political systems) still held a benevolence that would be incredible to the men of today, i.e., a smiling, confident good will of man to man, & of man to life. … 

    "It has been said and written by many commentators that the atmosphere of the Western world before World War I is incommunicable to those who have not lived in that period…It is [certainly] impossible for the young people of today to grasp the reality of man's higher potential & what scale of achievement it had reached in a rational (or semi-rational) culture. But I have seen it. I know that it was real, that it existed, that it is possible. It is that knowledge that I want to hold up to the sight of men—over the brief span of less than a century—before the barbarian curtain descends altogether (if it does) & the last memory of man's greatness vanishes in another Dark Ages."

~ Ayn Rand, from her introduction to her 1969 essay collection The Romantic Manifesto: A Philosophy of Literature

* From Stefan Zweig’s 1942 autobiography, which is also a biography of the collapse of Europe into barbarism, The World of Yesterday

What's a Corporation?

"To differentiate it from a partnership, a corporation should be defined as a legal and contractual mechanism for creating and operating a business for profit, using capital from investors that will be managed on their behalf by directors and officers. To lawyers, however, the classic definition is U.S. Chief Justice John Marshall’s 1819 remark that 'a corporation is an artificial being, invisible, intangible, and existing only in contemplation of law.' But Marshall’s definition is useless because it is a metaphor; it makes a corporation a judicial hallucination."

~ Robert Hessen, from his article 'Corporations' at the Concise Encyclopedia of Economics [hat tip David R. Henderson]

 

"...the Minister for Broadcasting has been silent. She has been criticised for this approach. In my view she should be applauded."

"Throughout the recent turmoil surrounding news media difficulties the Minister for Broadcasting has been silent. She has been criticised for this approach. In my view she should be applauded. Without any State intervention a solution for the problems surrounding Newshub was found – by the industry and the market. That is as it should be. There has been far too much State interference with the media. The Public Interest Journalism fund ... provides an example."

~ A Halfling's View, from his post 'Dealing with State-Owned Media'

Israel + Gaza: What Would Thatcher Do Today? (WWTDT?)

"For a party that has failed to escape [Margaret] Thatcher’s long shadow, ... perhaps what is most remarkable is how far the current [U.K.] Conservative Party’s aspiring populist wing diverges from Thatcher’s own approach to the conflict. Following [Israel']s invasion of Lebanon in 1982, a disaster that she correctly foresaw would birth new and harder threats to both the Western order and Israel’s own security, Thatcher placed an embargo on British weapons sales to Israel, a policy that was not lifted until 1994. Her rationale, as she told ITN, was that Israeli troops had 'gone across the borders of Israel, [to] a totally independent country, which is not a party to the hostility and there are very very great hostilities, bombing, terrible things happening there. Of course one has to condemn them. It is someone else’s country. You must condemn that. After all, that is why we have gone to the Falklands, to repossess our country which has been taken by someone else.'...
    "For Thatcher — perhaps counterintuitively, viewed through the prism of today’s Conservative party — the 'plight of the landless Palestinians' was a major foreign-policy concern. ... Striving to find a workable peace, Thatcher asserted the only possible solution to the conflict was an approach which balanced 'the right of all the states in the region — including Israel — to existence and security, but also demanded justice for all peoples, which implied recognition of of the Palestinians’ right to self-determination.' Writing of her visit to Israel in 1986, the first by a British prime minister, Thatcher remarked that 'The Israelis knew… that they were dealing with someone who harboured no lurking hostility towards them, who understood their anxieties, but who was not going to pursue an unqualified Zionist approach.' Instead, she 'believed that the real challenge was to strengthen moderate Palestinians, probably in association with Jordan, who would eventually push aside the… extremists. But this would never happen if Israel did not encourage it; and the miserable conditions under which Arabs on the West Bank and in Gaza were having to live only made things worse.' ...
    "To Thatcher, peace would entail not an independent Palestinian state — she thought this unviable, and most probably undesirable — but the incorporation of the West Bank and Gaza under the rule of Jordan’s Anglophile King Hussein. Yet when Thatcher signed on to an European Community declaration of support for Palestinian statehood, just days after the PLO confirmed its commitment to the destruction of Israel, and was condemned for this by the Labour leader Jim Callaghan — British attitudes on the conflict were yet to assume their present form — Thatcher responded in robust terms. “The words in the communiqué I support entirely,” she told the House. “They concern the right of the Palestinian people to determine their own future. If one wishes to call that ‘self- determination’, I shall not quarrel with it. I am interested that the Right Hon. Gentleman appears to be attempting to deny that right. I do not understand how anyone can demand a right for people on one side of a boundary and deny it to people on the other side of that boundary. That seems to deny certain rights, or to allocate them with discrimination from one person to another.”
    "Strikingly, Thatcher condemned Israel for its annexation of the Golan Heights from Syria, for its attack on Saddam Hussein’s Osirak nuclear power plant, and for its seizure of Palestinian land for settlements, including the housing of Soviet Jewish refugees: as she told the House in 1990, 'Soviet Jews who leave the Soviet Union – and we have urged for years that they should be allowed to leave – should not be settled in the Occupied Territories or in East Jerusalem. It undermines our position when those people are settled in land that really belongs to others.' Indeed, as she later remarked in her memoirs, 'I only wished that Israeli emphasis on the human rights of the Russian refuseniks was matched by proper appreciation of the plight of landless and stateless Palestinians.' With such sentiments, it is doubtful that today’s self-proclaimed Thatcherites would find a prominent place for Thatcher herself in their nascent faction."

~ Aris Roussinos, from his article 'What Thatcher can teach the pro-Israel Right'

 

Advice to would-be freedom activists

"Above all, do not join the wrong ideological groups or movements, in order to 'do something.' By 'ideological' (in this context), I mean groups or movements proclaiming some vaguely generalised, undefined (and, usually, contradictory) political goals. (E.g., [a] 'conservative party' that subordinates reason to faith, and substitutes theocracy for capitalism; or ... 'libertarian' hippies who subordinate reason to whims, and substitute anarchism for capitalism.) To join such groups means to reverse the philosophical hierarchy and to sell out fundamental principles for the sake of some superficial political action which is bound to fail. It means that you help the defeat of your ideas and the victory of your enemies. (For a discussion of the reasons, see 'The Anatomy of Compromise' in my book Capitalism: The Unknown Ideal.)"

~ Ayn Rand, from her essay 'What Can One Do?'

"The line isn't Left vs Right. It's 'the truth matters' versus 'the truth is what we need it to be'."[UPDATED]

 

"The line isn't Left vs Right. It's 'the truth matters' versus 'the truth is what we need it to be.' That's the epistemological line between good and evil. The Activist Left knows that's the actual line, and they've known it for a long time. ...

    "There are people who reject the dialectical approach. Then there are people broken by it. Finally, ... there are people who know exactly what they're doing and do it to deceive and conquer."

~ James Lindsay

RELATED:

"In universities across the world, humanities departments have, over time, come to reject the notion that there is such a thing as objective truth.
    "This nihilistic outlook was originally promoted by a small group of academics in the mid-20th century, but is now the dominant philosophy in a range of disciplines from literary criticism to gender and cultural studies. And while the doctrine has quietly swallowed the humanities, many thought it would never infiltrate the hard sciences. If one is engineering a bridge, for example, it would be reckless to reject the objective truth of gravity. If one is studying mathematics it would be foolish to deny that 2 + 2 = 4. 

    "And, rather than being a method to discover how the world works, such theorists argue Western science has been used as a tool to subjugate others. Efforts to 'decolonise' science are therefore efforts to undo this subjugation, by bringing into the fold other 'ways of knowing' that exist outside scientific methodology. These might include local knowledge about land management, religious knowledge about cosmology, or traditional ways of healing. Writing at 'The Conversation,' academic Alex Broadbent, of the University of Johannesburg, argues: 'There is African belief, and European belief, and your belief, and mine – but none of us have the right to assert that something is true, is a fact, or works, contrary to anyone else’s belief.' ... 

    "But herein lies the irony – by indulging the de-colonial activist agenda that rejects the existence of objective truths or a hierarchy of knowledge, universities undermine the very premise on which society deems them worthy of public funding. If we accept the de-colonial notion that no form of knowledge can be deemed superior to any other, then what exactly are students paying for? What specialised skills or benefits do university graduates gain that non-graduates lack? Why should the public continue to fund these multibillion-dollar organisations if the knowledge they offer is just as valid as any other 'way of knowing'?"

~ Claire Lehman, from her column 'In maths, truth & knowledge can't be mere matters of opinion'

"Under a better Resource Management system [sic], there would be no need for fast-track approval processes."

"Under a better Resource Management system [sic], there would be no need for fast-track approval processes. The fast process would simply be the process."

~ Nick Clark from his op-ed 'For a better fast-track'

Paying bureaucrats is not a stimulus programme

"It would be a mistake to view public sector staffing as a stimulus programme for Wellington and cafes and bars."

~ Eric Crampton (and Liberty Scott) on Tova's tosh

 

"The capitalist system was termed 'capitalism' not by a friend of the system, but by Karl Marx" [updated]

"The capitalist system was termed 'capitalism' not by a friend of the system, but by an individual who considered it to be the worst of all historical systems, the greatest evil that had ever befallen mankind. That man was Karl Marx. Nevertheless, there is no reason to reject Marx’s term, because it describes clearly the source of the great social improvements brought about by capitalism. 

    "Those improvements are the result of capital accumulation; they are based on the fact that people, as a rule, do not consume everything they have produced, that they save—and invest—a part of it. 

    "There is a great deal of misunderstanding about this ... [not least that] capitalist savings benefit workers.

"An often unrealised fact about capitalism is this: savings mean benefits for all those who are anxious to produce or to earn wages. When a man has accrued a certain amount of money—let us say, one thousand dollars—and, instead of spending it, entrusts these dollars to a savings bank or an insurance company, the money goes into the hands of an entrepreneur, a businessman, enabling him to go out and embark on a project which could not have been embarked on yesterday, because the required capital was unavailable.
    "What will the businessman do now with the additional capital? The first thing he must do, the first use he will make of this additional capital, is to go out and hire workers and buy raw materials—in turn causing a further demand for workers and raw materials to develop, as well as a tendency toward higher wages and higher prices for raw materials. Long before the saver or the entrepreneur obtains any profit from all of this, the unemployed worker, the producer of raw materials, the farmer, and the wage- earner are all sharing in the benefits of the additional savings.
    "When the entrepreneur will get something out of the project depends on the future state of the market and on his ability to anticipate correctly the future state of the market. But the workers as well as the producers of raw materials get the benefits immediately....
    "The scornful depiction of capitalism by some people as a system designed to make the rich become richer and the poor become poorer is wrong from beginning to end. Marx’s thesis regarding the coming of socialism was based on the assumption that workers were getting poorer, that the masses were becoming more destitute, and that finally all the wealth of a country would be concentrated in a few hands or in the hands of one man only. And then the masses of impoverished workers would finally rebel and expropriate the riches of the wealthy proprietors....
    "If we look upon the history of the world, and especially upon the history of England since 1865, we realize that Marx was wrong in every respect. There is no western, capitalistic country in which the conditions of the masses have not improved in an unprecedented way. All these improvements of the last eighty or ninety years were made in spite of the prognostications of Karl Marx.
    "We must realise, however, that this higher standard of living depends on the supply of capital. ... A country becomes more prosperous in proportion to the rise in the invested capital per unit of its population."

~ Ludwig Von Mises, from the collection of six of his lectures titled Economic Policy: Thoughts for Today and Tomorrow, and in Brazil under the title As Seis Lições (The Six Lessons) [hat tip Renato Moicano]

UPDATE:  Sad news just in that economic historian Robert Hessen has just died. David R. Henderson remembers him, and quotes from his contribution to the Concise Encylopaedia of Economics on Capitalism. 

"Capitalism,” a term of disparagement coined by socialists in the mid-nineteenth century, is a misnomer for “economic individualism,” which Adam Smith earlier called “the obvious and simple system of natural liberty” (Wealth of Nations).   Economic individualism’s basic premise is that the pursuit of self-interest and the right to own private property are morally defensible and legally legitimate. Its major corollary is that the state exists to protect individual rights. Subject to certain restrictions, individuals (alone or with others) are free to decide where to invest, what to produce or sell, and what prices to charge. There is no natural limit to the range of their efforts in terms of assets, sales, and profits; or the number of customers, employees, and investors; or whether they operate in local, regional, national, or international markets.

Here’s another great paragraph:

In early-nineteenth-century England the most visible face of capitalism was the textile factories that hired women and children. Critics (Richard Oastler and Robert Southey, among others) denounced the mill owners as heartless exploiters and described the working conditions—long hours, low pay, monotonous routine—as if they were unprecedented. Believing that poverty was new, not merely more visible in crowded towns and villages, critics compared contemporary times unfavourably with earlier centuries. Their claims of increasing misery, however, were based on ignorance of how squalid life actually had been earlier. Before children began earning money working in factories, they had been sent to live in parish poorhouses; apprenticed as unpaid household servants; rented out for backbreaking agricultural labor; or became beggars, vagrants, thieves, and prostitutes. The precapitalist “good old days” simply never existed (see industrial revolution and the standard of living).

And:

Despite these constraints, which worked sporadically and unpredictably, the benefits of capitalism were widely diffused. Luxuries quickly were transformed into necessities. At first, the luxuries were cheap cotton clothes, fresh meat, and white bread; then sewing machines, bicycles, sporting goods, and musical instruments; then automobiles, washing machines, clothes dryers, and refrigerators; then telephones, radios, televisions, air conditioners, and freezers; and most recently, TiVos, digital cameras, DVD players, and cell phones. ...

That these amenities had become available to most people did not cause capitalism’s critics to recant, or even to relent. Instead, they ingeniously reversed themselves. Marxist philosopher Herbert Marcuse proclaimed that the real evil of capitalism is prosperity, because it seduces workers away from their historic mission—the revolutionary overthrow of capitalism—by supplying them with cars and household appliances, which he called “tools of enslavement.”Some critics reject capitalism by extolling “the simple life” and labeling prosperity mindless materialism. In the 1950s, critics such as John Kenneth Galbraith and Vance Packard attacked the legitimacy of consumer demand, asserting that if goods had to be advertised in order to sell, they could not be serving any authentic human needs. They charged that consumers are brainwashed by Madison Avenue and crave whatever the giant corporations choose to produce and advertise, and complained that the “public sector” is starved while frivolous private desires are being satisfied. And having seen that capitalism reduced poverty instead of intensifying it, critics such as Gar Alperovitz and Michael Harrington proclaimed equality the highest moral value, calling for higher taxes on incomes and inheritances to massively redistribute wealth, not only nationally but also internationally.

A question for you all on those sackings [updated]

 

At times like this you might ask yourself:
"What would Sir Humphrey do?"

Imagine you're Sir Humphrey. Head of a government department.

Now, imagine you minister has issued instructions to sack a given number of pen-pushers in your department. Simply to sack a given number, without real guidance as to whom. Leaving it to you to decide on whom the axe will fall.

So, here's the question: do you sack the folk who are most effective and most needed?

Or are those to whom you give the DCM the least useful, most surplus-to-requirements?

I'll give you a moment to think about it ...

What to say post-fight

 

I don't recommend you tune into cage-fighting TV. Not unless you just skip straight to the post-fight interviews — though I doubt they're all as admirable as this one ...

"If you care about your fucking country," said rising Brazilion champion Renato Moicano, "read Ludwig Von Mises and 'The Six Lessons' of the Austrian economics school, motherfuckers."

He's right you know. You should. Motherfuckers. 

But a strange thing to have in your head, right, after several minutes of beating in someone else's. He explained later that "as his platform continues to enlarge, [he] wants to use his spotlight to help change the world, particularly the United States."

“A lot of people talk to me about money. But, the problem is, it’s not about how much money you get, it’s about how much money you can keep. With the inflation how it is…and this book, he explained what the government does with your money ,with taxes, and the way they [finance] debt… 

“[I]n Brazil, people are going crazy with [my interview], a lot of people have gotten interested in it and how people are getting taxed with inflation. My message is so important…it’s crystal clear. If you don’t control the debt, that’s going to ruin this country. We need a free market of ideas.”

He's right. We do. 

[Click here for the free e-book or PDF; and on the Ludwig Von Mises tag below to see what I've written over the years about the great man.] 

UN 'integrity'

"Twenty years of soft power, lobbies and corruption and we have a UN where Russia occupies the chair of Security Council, Iran chair of Disarmament, Saudi Arabia as chair of Gender Equality and Women's Rights."

~ Arthur Rehi

"The RMA’s starting position is that you need permission. It is going to be dumped." But ...

"Did you know it costs 50% more to build a house here than it does in Australia? ...
    "We [sic] have successfully regulated our housing market so tightly that only the children of existing homeowners can obtain the financing to purchase property. We [sic] have created a landed gentry. ...
    "There are two reasons for this; land use restrictions and building regulations.
    "Let’s start with land use. The Resource Management Act, or RMA, began life in 1991 as a blueprint for preventing Kiwis doing anything with their land unless it complied with a national environmental plan and had the consent of the local council. ...
     Again. ...
    "Simon Court, the Act MP and Undersecretary with the responsibility for drafting the replacement, has a different outlook. You can do whatever you want with your land, so long as it does not interfere with someone else’s property or rights. [Not true. See below.* - Ed.]
    "[But] this reform is 18 months away and will be in place for less than a year before the next election. ... National and Act have had six years to draft their RMA replacement. [And they haven't. - Ed.]
    "There are plenty of interested parties who would have contributed to this effort and a bill should have been ready to present to a select committee in the first hundred days. [Yes, it damn well should have been. - Ed.]
    "The longer any RMA replacement has to gain acceptance the more durability it will enjoy upon a return to a Labour-led government, and Labour have their RMA bill already drafted and ready to go; that being the one Court and his mates deleted on Christmas Eve. [Not to mention the not-insignificant regime uncertainty in the market until the replacement Act filters down to council's 'planners.' - Ed.]

~ Damien Grant, from his over-optimistic column 'Housing market so tightly regulated we’ve created landed gentry'

* Court's most-developed explanation of his proposed 'Urban Development Act' begins this way:

"Under ACT’s Urban Development Act, limits for urban development would continue to be based on locally-decided [council] plans."

So rather than a plethora of sackings of the unproductive, Court — a 'planner' himself by profession — proposes instead to keep his colleagues planners hard at work.

"These plans [his 'reform' plan continues] have democratic mandates [sic] and protect the legitimate expectations of property owners, while allowing councils to plan for infrastructure delivery."

Translation: Our party's two leading MPs represent home-owners in the country's leafiest suburbs, pledged to protect the unreasonable expectations of those suburbs' home-owners about what can be built next door.

"Councils [says Court] will not be permitted to restrict housing density more than the Auckland Mixed Housing Suburban zone."

Auckland's MHS "zone," by the way, essentially mandates for more of the same tightly restricted suburbia. And this confirms that zoning will still be with us, as well as planners. (How this reflects, as Grant says, 'doing what you want on your land as long as it doesn't affect someone else's property right,' Court alone knows. I suggest they both read Bernard Siegan.) 

"These zoning rules [Court says] have already been validated [sic] through extensive litigation in the Environmental Court ..."

One would have expected to see the back of that meddling court damned soon. Sadly, it seems however, we have a Court who refuses to meddle enough in his 'reforms,' and is doing it so damn slowly we will have years of uncertainty in what folk can plan to build on their own land.

 

"Whenever there is a proposal for a tax cut ... "

"Whenever there is a proposal for a tax cut, media pundits demand to know how you are going to pay for it. But when there are proposals for more spending on social programmes, those same pundits are strangely silent."

~ Thomas Sowell, from his 1999 book, Barbarians Inside the Gates [hat tip Cafe Hayek]

 

"...by definition, good people don't want to control other people's lives.”

“Some leftists believe that the communist world would work if 'good people' were in control. But they don't realise that, by definition, good people don't want to control other people's lives.”

~ attrib. Ludwig von Mises [hat tip Stephen Hicks]

The Governor who printed $50 billion of inflation ...

"Yesterday the Reserve Bank ... released a statement saying, 'The NZ economy continues to evolve as anticipated by the Monetary Policy Committee.' What a line coming from a Governor who told 'Bloomberg News' in the US in 2021, whilst he was busy printing $50 billion in cash, which is the primary cause of our current high inflation, that "The fear of the 70s, the 80s, stagflation, it is such a different world [now]." How amusing, given that stagnation, recession & inflation is exactly what we are now experiencing. How amusing that the RBNZ says our economy continues to evolve as anticipated when its forecasts could not have been proved more wrong.
    "It gets worse. ..."

~ Robert MacCulloch, from his post 'When will the Reserve Bank of NZ Stop Spinning and Stop Misleading Parliament and the Nation?'